The impact of ECW's deal with Acclaim is huge.  In fact this deal is more
important to the long-term success of ECW than having a weekly show on TNN.

The news of Acclaim producing the ECW video game was not much of a surprise.
This has been something that I'm sure has been in place for months now but
could not be announced because of Acclaim's existing deal with the WWF that
only expired last week.

The big surprise, and the more significant part of this whole deal, is
Acclaim taking a minority interest in ECW.  What this means is that Acclaim
now owns part of ECW.  This is just a shot in the dark, since a minority
interest could be anywhere between 1-49%, but I would guess that Acclaim now
owns about 20% of the company.

For consideration of this minority interest in ECW, Acclaim has given ECW
cash, a much-needed asset for ECW.  How much cash exchanged hands is also
unknown but I think $10 million is a conservative estimate. As of 8/31/99,
Acclaim had $74 million of cash on hand that could go towards this.

(Based on its current stock price the WWF is worth roughly $1.4 billion.  If
you were to say ECW was worth 5% of the WWF that would put ECW at a value of
$70 million.  A 20% interest of $70 million would be $14 million so an
estimate of $10 million is in the ballpark.  Paul E. will now need to be
known as Millionaire Paul E).

The impact of this deal is huge.  For one ECW, barring multiple major
screwups, is 'in the clear' financially.  You will no longer hear stories
about bouncing checks or how the company is ready to go under.  This
infusion of cash into ECW allows them to do a lot of things they might not
have otherwise, such as paying off debt, upgrading equipment, acquiring
talent, retaining talent and a whole host of other things.

In addition, with Acclaim as a partner, ECW now has a whole new host of
connections throughout the business world, which while not sounding terribly
exciting is very valuable.

Acclaim has two major reasons why the success of ECW is important to them.
One, they hold a minority interest in the company and share in their
percentage of profits.  The other is that they are selling the video game
(is there an Atari 2600 version coming out?).  The larger the ECW fan base
is the more games that Acclaim will sell.  Therefore it's in their best
interest for the ECW fan base to grow.  It's for these reasons why we will
likely see a major ECW advertising promotion from Acclaim in conjunction
with ECW in the near future.  Up to now we haven't seen much advertising
because TNN doesn't have the same interest in seeing ECW succeed as Acclaim
now does.  In addition, ECW, up to this point, didn't have the capacity to
do this on there own either so that is largely why the rating has been
siting at 1.

Who would have thought that before the end of this century you would be able
to own a piece of each of the 3 major wrestling organizations?  You can own
the WWF directly (ticker: WWFE), WCW through Time Warner (ticker: TWX), and
now ECW through Acclaim (ticker:  AKML).  It's a crazy world.

If you made it to the bottom of this column without falling asleep I'm
impressed.

Send any feedback, questions, or column ideas to me at [email protected]

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